The Times - Doubts over Indivior’s future amid legal threat28 Jul 2023 18:46
The former pharmaceuticals business of Reckitt Benckiser has issued a going concern warning as it continues to battle lawsuits over its blockbuster opioid addiction treatment.
Indivior, a FTSE 250 drugs company based in Slough, Berkshire, is facing a trial in a federal court in the United States in October over allegations from a group of claimants that it violated antitrust and consumer protection laws in its marketing of Suboxone Film.
Indivior is exploring a possible settlement as it prepares for the trial in the Eastern District of Pennsylvania and believes it has “meritorious defences”.
However, it cautioned that if it were found liable at trial and was unable to reduce the damages it “represents a material uncertainty that may cast significant doubt upon the group’s ability to adopt the going concern basis of accounting in the future”.
Indivior was spun off from Reckitt, the FTSE 100 consumer goods group behind Nurofen and Dettol, in 2014 and has built a dominant position in the US, where its treatments are prescribed to recovering addicts to reduce withdrawal symptoms amid an addiction crisis.
But its reputation, balance sheet and share price have been hampered by investigations and lawsuits relating to Suboxone. Indivior agreed to pay $600 million to the US authorities and admitted a criminal charge to resolve an investigation into the marketing of its opioid addiction treatment three years ago. Shaun Thaxter, Indivior’s former chief executive, was also jailed for six months in the US after pleading guilty in 2020 to introducing misbranded drugs into interstate commerce.
Separately, Indivior reached a $103 million agreement to resolve claims brought by more than 40 states in June in multi-district litigation, but remains in dispute with two other sets of claimants. It made a total provision of $290 million to cover the litigation, including the $103 million settlement.
Shares in Indivior, which dual listed on New York’s Nasdaq last month, closed down 49p, or 2.6 per cent, at £18.25 on the London Stock Exchange, despite issuing strong half-year sales and upgrading its forecasts.
James Vane-Tempest, an analyst at Jefferies, said the going concern warning was the “wildcard ultimate downside scenario which would likely have to assume no settlement, Indivior goes to trial and loses and all appeals are lost and triple damages are awarded”.
Mark Crossley, Indivior’s chief executive, said “we are focused on resolving outstanding matters at the right value”.
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